Digital transformation is no new fad. With new digital technologies disrupting markets and revolutionising the way we work, organisations know they need to keep up if they are to maintain their competitive edge. While many do so through a digital transformation program, not many are successful. In fact, research shows that 70% of all digital transformations do not achieve their goals and an estimated $900 billion goes to waste as a result.
Transformation offices emerged out of this need to fill a critical gap between transformation strategy and implementation. So just what is the transformation office, why is it valuable for your business and what are the key functions that enable it to support your organisation’s transformation program? Read on to find out!
What is the Transformation Office?
The Transformation Office, also sometimes known as the Transformation Management Office (TMO), is an enterprise function that is responsible for an organisation’s complex transformation initiatives and ensuring they are fully integrated on both operational and strategic levels. The TMO acts as the critical link between executive vision and the day to day activities of the enterprise, providing them with the necessary authority to make significant changes under the orders of the board and key influencers within the organisation.
A Transformation Office can be understood as a Project Management Office with a bigger yet more specific scope. While the PMO is critical for maintaining effective practices and ensuring strategic alignment, organisations are now learning that successful digital transformation requires more than just status tracking and risk escalation – it necessitates an approach that focuses on value-realization throughout its execution of transformation initiatives.
What makes a Transformation Office different from a PMO?
Let’s elaborate on what makes a transformation office different from a PMO. There a two key differences:
1. The scope of the transformation office is wider than the typical PMO
As alluded to above, the transformation office has a broader scope while also having a higher level of authority to enforce change within the organisations. TMOs often work very closely with the Transformation or Company Steering Board and has a direct link with senior executives, their strategies and opinions. While PMOs are also often engaged with senior management, the TMO Director has more authority and confidence to enforce the necessary changes, often enterprise-wide changes, in organisations that align with the strategic objectives of the enterprise and the board.
2. The transformation office is both transitory yet recurring in nature.
While PMOs can also be transitory in rare cases, transformation offices are typically confined to the confines of the transformation programme itself and will shut down at its completion. However, change is inevitable and ever-present. In our fast-paced market, new digital technologies and trends are being introduced that could make a significant difference in organisational productivity and efficiency.
As a result, the transformation office, while transitory, is a recurring feature of organisations and requires a robust framework to be established that will enable future teams to quickly build and adapt their teams to their future transformation needs. While every transformation is unique, a transformation office is typically focused on achieving strategic objectives, encouraging financial growth and facilitating a more agile and responsive organisation.
Key functions of the Transformation Office
Just like a PMO, a transformation office is very much a jack of all trades and needs to balance multiple functions to be properly successful. Some key functions of the transformation office include:
Support and Insight
One of the biggest challenges of a digital transformation program is securing buy-in from all stakeholders, particularly senior management and employees. If they cannot see the value of the digital transformation for themselves, they are less likely to invest and fully utilise the new tools and processes. TMOs play an important role in supporting and encouraging digital transformation initiatives by making them accessible, relatable and valuable to key stakeholders.
Additionally, TMOs play a critical role in gathering data and insights into the overall implementation of the transformation program. Most transformations, particularly digital transformations, are enterprise-wide initiatives that require large amounts of data to be effectively managed. This data becomes valuable as a historic reference and justification for future transformation initiatives within the organisation.
Strategic alignment and leadership
The key function of the transformation office is to make sure that all transformation activities are aligned with the strategic objectives of the organisation and can provide the most value. Many organisations implement change initiatives after jumping on the hyped bandwagon of certain hot technologies, tools or approaches. While adapting to upcoming technology is one way to maintain a competitive edge, it is not always what is necessary.
The transformation office needs to help build the clear link between the organisation’s strategic objectives and clearly relate it to employees across the entire organisation. No change is comfortable and people are less likely to want to take part in any change initiative if there is no clear leadership, direction, communication and direction. The transformation office acts as the leader and guiding light for employees within the organisation and are responsible for steering everyone through the transformation process as smoothly as possible.
Adoption and project management
Just introducing a whole new process, too, or system is not enough. Without setting the right cultures, practices and frameworks in place, transformation initiatives are more likely to be met with resistance than acceptance. The task of the transformation office is to make sure pre-existing cultures and practices of the organisation are conducive for the new change implementation.
Additionally, the transformation office needs to handle general everyday project management activities such as checking schedules, resources, feedback and more to ensure reporting is real-time and data is accurate. As transformation programs are very much like typical projects with time, resource and scope restraints, the transformation office needs to maintain those factors at all times to ensure the transformation is successful.
Portfolio management and project prioritisation
As they have been given higher authority to make changes within the organisation, the transformation office has a significant influence over the organisation’s project portfolio management activities. Depending on the type of transformation program and the level of priority attributed to it, the transformation office has the power to influence which projects are prioritized in alignment with the strategic objectives of the transformation program.
With transformation initiatives typically being enterprise-wide and costly, resources have to be properly allocated and balanced against the general projects within the organisation to make sure that the most value is being delivered at any given moment, even in the situation where the transformation program may fail. Optimising resources and minimising risks is a critical task of the transformation office.
As mentioned above, the transformation office is focused on achieving value and not just meeting goals and objectives. One of the key ways of enabling value generation is by implementing a robust benefits management framework. Benefits management helps the transformation office make sure all their transformation initiatives can be linked back to a strategic objective and thus is generating the intended value for the organisation.
For example, implementing a new top-of-the-line internal PPM software may be great but if the organisation’s most important strategic objective for the year was to increase customer retention and relation, implementing a new CRM system may have been the more value-adding option.
Digital transformations, in particular, benefit greatly from effective benefits management activities as they can track ongoing benefits long beyond the scope of the transformation program and the transformation office itself. Having this system in place is critical for long-term analysis and optimisation. The transformation office not only needs to make sure it is properly established but also ensure the right processes are in place to hand over the activities to the relevant people when the transformation office itself has already closed.
Get started on your business transformation journeywith pmo365
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If you want to know more about how pmo365 can help your digital transformation program, make sure to chat with our experts and see our solution in action!